British Pound: Sustained break above 1.3650 may open 1.41 – Scotiabank

Scotiabank strategists Shaun Osborne and Eric Theoret note that GBP/USD gains into the mid-1.36s are driven more by US Dollar (USD) weakness than intrinsic British Pound (GBP) strength, though United Kingdom (UK) survey data show improving manufacturing orders and pricing power. Technically, Cable has met the near-term objective of retesting the May peak, and a sustained move above 1.3650/60 is seen implying scope for an extension towards 1.41 this year.

Cable targets higher after May peak retest

"Sterling gains to the mid-1.36s largely reflect our general outlook for the pound but the story is clearly more about USD weakness than GBP strength at the moment."

"The August CBI Trends survey reflected significant improvement in still weak manufacturing orders (to the best level since late 2024) and a rebound in industrial pricing power."

"Bullish—Cable gains have reached our near-term objective of a retest of the early May peak at 1.3658."

"Underlying trend dynamics remain solidly bullish and, after a period of range trading and two tests of 1.3150 (April and June), a sustained push above 1.3650/60 implies potential for an extension towards the 1.41 zone over the balance of the year."